TLDR
- Atlassian stock jumped 23% in premarket trading after beating Q3 fiscal 2026 earnings and revenue estimates.
- Revenue came in at $1.787 billion, above the $1.696 billion expected; EPS of $1.75 beat the $1.33 estimate.
- The company raised full-year revenue growth guidance to 24%, up from 22%.
- Cloud revenue grew 29% year-over-year, beating consensus estimates by 4.5%.
- Multiple analysts raised price targets, with Cantor Fitzgerald moving to $107 and KeyBanc maintaining a $130 target.
Atlassian stock was trading above $84 in premarket Friday, up roughly 23%, after the company posted a strong fiscal third quarter.
The stock had closed at $68.59 on Thursday, down nearly 3% on the day, and had lost more than 50% of its value in 2026 before the report. Over the past 12 months, it was down more than 70%.
Revenue for the quarter came in at $1.787 billion, beating the $1.696 billion consensus. EPS of $1.75 cleared the $1.33 estimate by a wide margin.
$TEAM (Atlassian) #earnings are out: pic.twitter.com/7wtkuCsXpD
— The Earnings Correspondent (@earnings_guy) April 30, 2026
Cloud revenue was a standout, growing 29% year-over-year — up from 26% in Q2 — and beating consensus by 4.5%.
The company’s Service Collection crossed $1 billion in annual recurring revenue and grew more than 30% year-over-year.
Remaining performance obligations rose 37% year-over-year to $4.0 billion, or more than 40% when adjusted for data center revenue timing.
Atlassian raised its full-year revenue growth guidance to 24%, up from the 22% it had forecast last quarter. It also lifted its cloud and data center revenue outlooks, along with adjusted gross and operating margin guidance.
CEO Mike Cannon-Brookes said the results reflected customers signing larger, longer-term commitments on Atlassian’s AI-powered platform.
Restructuring Costs Hit Free Cash Flow
Free cash flow missed consensus by 31%, largely due to $94 million in restructuring-related cash payments in the quarter. Another $76 million is expected in Q4.
In March, the company announced it was cutting around 1,600 workers — about 10% of its workforce. Cannon-Brookes said the cuts were intended to “self-fund further investment in AI and enterprise sales.”
Restructuring savings are expected to add roughly five percentage points to Q4 operating margin.
Gross margin expanded due to cloud infrastructure optimization, beating consensus by one percentage point and holding at 84%.
Analyst Targets Move Higher
Cantor Fitzgerald raised its price target to $107 from $98, maintaining an Overweight rating, citing cloud revenue strength and data center performance.
BofA Securities raised its target to $100, while BMO Capital moved to $105 with an Outperform rating.
UBS lowered its target slightly to $95 but acknowledged cloud revenue growth came in above both guidance and its own estimates.
KeyBanc kept its Overweight rating with a $130 price target, pointing to revenue acceleration as a positive signal.
Data center upside in the quarter was partly timing-driven, as customers pulled forward purchases ahead of an end-of-life announcement and a March price increase.
InvestingPro analysis flagged the stock as undervalued at current levels, placing it among undervalued opportunities in the software sector.
🚨 Our April Stock Picks Are Live!
A new month means new opportunities. Our analysts have just released their top stock picks for April, highlighting companies with strong momentum that rank highly on our KO Score algorithm. We’re also now sharing trade ideas for both long-term and short-term investors, giving you more ways to spot potential opportunities in the market.
Sign up to Knockout Stocks today and get 50% off to unlock the full list and see which stocks made the cut.
Use coupon code Special50 for your exclusive discount!
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
